How do i account for a 2-1 mortgage interest buy down that is tax deductible to the buyer?

[zomboo]

The 2-1 interest buy down is prepaid interest and is therefore 'points'. If the seller supplied the funds for the buy down, it is still deductible as points for the buyer. In this case, the seller adds the amount of the buy down to the cost of selling the home and the buyer subtracts the buy down amount from the home basis.